As large industrial properties remain scarce in the Springfield area, many smaller warehouse and production facilities are filling up. According to real estate market tracker Xceligent’s latest Market Trends report, the industrial vacancy rate in the Springfield area is 3.8 percent, a full percentage point below first-quarter 2014.
Potentially further driving down the vacancy rate, the former ViaTech Publishing Solutions Inc. building at 424 N. Cedarbrook Ave. sold early in the second quarter, and the former Regal Beloit Corp. (NYSE: RBC) manufacturing plant on East Sunshine Street is now under contract.
It’s not just industrial properties that have become desirable. Vacancies improved across all sectors – industrial, retail and office – in the first quarter, according to Xceligent’s report analyzing commercial activity in Springfield, Strafford, Rogersville, Ozark, Nixa, Republic and Willard. The retail vacancy rate landed at 4.5 percent compared to 4.8 percent in first-quarter 2014, while office vacancies registered an 8.8 percent rate, down from 9 percent in the first quarter last year.
R.B. Murray Co. Vice President Ross Murray said interest in all commercial sectors is higher than it has been since before the recession.
“Now, talk has turned into action,” Murray said.
Springfield Business Journal compiled data across all market sectors from Xceligent’s first-quarter report and determined a 4.6 percent vacancy rate for the area’s 1,827 commercial properties representing over 54 million square feet.
IndustrialKirk Heyle, owner of Heyle Realtors & Consulting Services LLC, leased or sold a handful of smaller warehouse and/or flex properties – a mix between industrial and retail – over the past several months.
In early April, he leased a 6,000-square-foot industrial property at 1315 W. College St. to nonprofit Incredible Thrift, which accepts clothing donations and provides jobs to the homeless.
Director James Bruggeman said the organization is using the warehouse space as a training ground.
Heyle’s listings include three industrial properties in northwest Springfield around 5,000 square feet apiece.
“A lot of time, there’ll be a distribution company from Tulsa or Kansas City that is testing the market or they’ve been here in a very small way and they’re going the next step up,” said Heyle, who serves on Xceligent’s local industrial board.
He said now could be a good time for developers to build some speculative warehouse properties, though he understands many lenders are still tight with the purse strings following the financial reforms prompted by the recession.
“They are still a little goosey from ’08, ’09 and ’10,” Heyle said.
One of the area’s larger industrial buildings, the 325,000-square-foot Regal Beloit plant on 43 acres is now under contract for $11 million through R.B. Murray Co. Murray said the undisclosed buyer plans to develop a retail center. In July 2013, Regal Beloit announced plans to lay off some 330 workers during an 18-month transition as the company moved the Springfield components to other Regal plants in the United States and Mexico.
Another big move, Murray said, was the mid-April sale of the 100,000-square-foot former ViaTech print shop.
New York-based D&H Missouri LLC transferred the deed for the former ViaTech building to CCMC Properties LLC on April 23, according to filings with the Greene County recorder’s office. According to Missouri secretary of state records, CCMC Properties was organized in March 2013 by Coby Collins, of Rogersville, owner of Springfield-based OSHA compliance and training firm National Safety Compliance Inc. Cullins could not be reached for comment by press time.
“What that is telling me is that we are now at a point where we are going to see some new construction,” Murray said.
“There are national, regional and local tenants who feel confident in where the economy is going because they are willing to do larger stores, more stores and relocations.”
Another notable first-quarter transaction was C-RAAP LLC’s purchase of a 17,200-square-foot light industrial property at 6537 W. Independence Drive in west Springfield. C-RAAP is registered to Steven VanDerBerg, president and CEO of Rockford, Ill.-based ServiceMaster Restoration, a franchise for water and fire damage restoration, mold remediation and carpet cleaning.
RetailMurray said most large retail centers in Springfield – such as the Fremont Center and Primrose Marketplace, which in March secured a Carter’s kids’ clothing store – are fully leased or nearly full, leaving vacancies more common in neigborhood strip centers.
“I think what you’re going to see is more redevelopment within the community of older buildings that will be torn down,” Murray said, pointing to the former Carlos O’Kelly’s restaurant property, which a Panera Bread Co. franchisee bought in the third quarter last year.
Traditional Bakery Inc. demolished the building in February and is now constructing an 8,000-square-foot development for a Panera Bread cafe and tenant space on the South Campbell Avenue site.
“I think you’ll see a lot more of that,” Murray said.
In the Queen City market, northeast Springfield boasted the lowest retail vacancy rate in the first quarter at 1.5 percent. Southwest Springfield recorded the highest vacancy rate at 7.6 percent, according to Xceligent.
OfficeThe office vacancy rate is down from a year ago, but up from 8.6 percent in the fourth quarter.
Ray Meyer, a broker and property manager with McLoud & Co. LLC, said office demand has gradually increased in recent years and the vacancy rate bump from the fourth quarter shouldn’t change that trend.
McLoud & Co. manages the 240,000-square-foot American National office building at Sunshine and Glenstone, and largely focuses on leasing and selling office and retail properties, Meyer said.
In the quarter, KPM CPAs PC vacated its 19,000-square-foot office next door to the American National complex following the accounting firm’s move to a new $6 million headquarters, a 33,000-square-foot building at Fremont Avenue and Republic Road. Also, about a mile west on Sunshine, Springfield Public Schools bought a nearly 30,000-square-foot Class B office building at 1610 E. Sunshine St. where IBM once had a presence.
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